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United, PMA end merger discussion

(Sept. 28, PACKER WEB EXCLUSIVE) Six months of discussions failed to yield traction toward a merger of the Produce Marketing Association and the United Fresh Produce Association, leaders of both groups said Sept. 26.

A group of six board members from each association had met in March and July to explore potential collaboration, according to statements from both associations.

After the July meeting, the groups agreed to make a determination of whether to continue talks on a potential merger or suspend further consideration.

While the two boards did not come to an agreement on proceeding with further discussion, both expressed their commitment to working together on common issues.

“I think the relationship is strong as it ever has been and going through this process together we gained mutual respect for what each association stands for,” said Peter Goulet, chairman of the Newark, Del.-based Produce Marketing Association and president of consulting company Pinnacle Sales & Marketing, Saco, Maine. “We both came away with an appreciation for what each association is trying to do to lend more value to their membership.”

Goulet said PMA entered in merger discussions with the purpose of seeing how the groups could work together.

“From PMA’s standpoint, we had a cross-functional team representing the entire supply chain, and at the end of the day we felt the core competencies of each association are very different,” he said.

“We are best represented with having two national associations at this point in time,” he added, though he didn’t rule out future merger talks.

United Fresh’s chairman affirmed the groups would continue to work together.

“I think the dialogue was useful,” said Emanuel Lazopoulos, senior vice president of North American sales, marketing and product management at Del Monte Fresh Produce, Coral Gables, Fla.

“We will continue to collaborate with PMA, Western Growers, the FFVA (Florida Fruit & Vegetable Association) and other associations in the best interests of the industry,” he said. “We have to collaborate on some many issues.”

DIFFERENCES

Goulet said PMA’s strengths are on the marketing side, while United’s historical expertise has been on the grower-shipper, agricultural side, particularly relating to legislative and regulatory issues.

However, Goulet said PMA would continue to keep government relations in its stable of industry services, because PMA members feel it is important. However, he said PMA won’t have the hands-on lobbying focus the way United Fresh does in Washington.

“We will play a role, but the subject matter will determine if we play a lead role or supportive role,” he said.

Meanwhile, he said PMA has the luxury of cash flow that allows it to provide unique services to its members.

Lazopoulos said each association offers its members value.

“Both associations are serving the industry in different ways,” he said.

Government relations, food safety and technical affairs represent United Fresh’s strength, while the PMA focus is marketing and networking.

“We thought the complementary services of each other’s association could potentially create a bigger, stronger association, but, obviously not at this time,” Lazopoulos said. “Maybe sometime in the future, but not at this time.”

Both associations went into discussions last spring and indicated they didn’t want to talk forever, said Tom Stenzel, president of the United Fresh.

“Neither association felt it made sense to go on and on and on,” he said. “It creates too much uncertainty for the industry.”

Collaboration between the two associations will depend on the topic, Stenzel said.

Some work will be high profile joint efforts like traceability while other issues like country of origin labeling will be lower profile, day-to-day consultation.

Stenzel said United Fresh is on solid financial footing, including bookings for its upcoming show in Las Vegas. The association’s show for 2009 has not been set, but United Fresh’s board meeting in late January could announce the venue for 2009.